The End of the Fixed Price ?

[Dustydazzler]

I am only small fry but even I desperately try to avoid offering anything on a 'fixed' price , I have been burned so many times mainly my own fault when I have only allowed X amount for time and Z amount for materials but under estimated both...

With so much volatility in the maetrials and copper market and ever increasing risks of contractors going bust , I would want weekly / monthly stage payments on a daily rate.

 

[pc1966]

In the sort of large-ish projects I used to do (not as spark though) it was common to have a staged payment plan. Something like 10% on contract signature, then a couple of milestones where XYZ was delivered and reviewed and (if all happy) another payment of 20-40% or so, and move on to the next phase until the end.

Both sides knew it had to work that way as you can't work for 1-2 years without income, and they can't expect to hand over the project total without knowing it is now working.

 

[Dustydazzler]

In the sort of large-ish projects I used to do (not as spark though) it was common to have a staged payment plan. Something like 10% on contract signature, then a couple of milestones where XYZ was delivered and reviewed and (if all happy) another payment of 20-40% or so, and move on to the next phase until the end.

Both sides knew it had to work that way as you can't work for 1-2 years without income, and they can't expect to hand over the project total without knowing it is now working.

How about holding to a 'fixed' price thou ?

If I quote a job and materials are say £50,000 today , I start the job which runs for 18 months and by the end materials have cost for £75,000 , who picks up the tab ? Me ? I can't afford to swallow a £25,000 hit

 

[pc1966]

How about holding to a 'fixed' price thou ?

If I quote a job and materials are say £50,000 today , I start the job which runs for 18 months and by the end materials have cost for £75,000 , who picks up the tab ? Me ? I can't afford to swallow a £25,000 hit

Materials are a different matter, most of my stuff was majority salary cost so you knew the going rates and didn't expect much change.

For big cable sales they often give you a LME range where it is valid (i.e. whole sale copper price) and if the metal market moves too far you get a different bill. For big electrical jobs you really would need to do that same sort of thing.

 

[pc1966]

I guess it is a tricky one as most customers want a fixed price, but things are not really fixed. Doing a quote on material & labour separately is one approach, you can use easy to check prices like screwfix as your official rate and let folks know they get charged the prices at the time bought, etc.

 

[Dustydazzler]

I guess it is a tricky one as most customers want a fixed price, but things are not really fixed. Doing a quote on material & labour separately is one approach, you can use easy to check prices like screwfix as your official rate and let folks know they get charged the prices at the time bought, etc.

Thats how I do it now on all re-wires , extensions etc

I charge a higher labour rate and very little mark up on materials often just giving the customer the screw fix or tool station receipts for the gear I have used. Works better for me but I can't imagine this system working on much bigger jobs thou like new builds ect when working for a developer